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China-Based Companies Benefit From China’s Changing Policies

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happy April 9, 2010 (Judy Zhang) Based on current government business policies and rules, China-based companies now have more top line revenue visibility. The toughening policies towards foreign companies actually work in favor of China-based companies.

Economic Transformation


China’s government, in general, is encouraging an economic transformation from a dependent “global factory” to a more independent and innovative economy. The aftermath of the global financial crisis, in fact, showed that China’s innovative economy can recover faster than others.


For example, after the financial crisis, many manufacturers in Jiangsu Province (one of the biggest manufacturing provinces) still showed sales declines. However, their neighbors in the Suzhou Industrial Park -- an area gathering hundreds of high-tech and innovative companies –recovered at a fast rate, up 21% compared with last year.

Indigenous Innovation

The China government recently unveiled new government procurement and patent rules that require “indigenous innovation”. These rules should help China-based companies acquire more government contracts.

It seems, therefore, that ‘indigenous innovation’ rules can create a better investment climate for China-based companies.

Equal Tax Environment

Until recently multi-nationals took advantage of various preferential tax refunds and reductions. However, at the beginning of 2008, a new income tax law mandated a universal income rate of 25% for all business. Since 1980s, multi-national companies were able to enjoy a much lower income tax rate (15% and 24%) compared to their Chinese counterparts (25%).

Maturity, prosperity, growth

These policy changes are a sign of gradual maturity and prosperity, because China doesn’t need preferential rules to encourage foreign investment in China.

Current government policy creates a better growth environment for China-based companies, and provides investors with more confidence regarding top line revenue growth.


中国本土公司有望从中国新政策中获益

基于中国政府近期颁布的一系列新的商业政策和规定,可以预测中国本土公司现拥有更广阔的收入前景。这些对于外国公司相对更加强硬的政策,实际上使中国本土公司获益匪浅。

经济转型

总的来说,中国政府目前正致力于使中国由依赖性的“世界工厂”模式向独立创新的经济模式转型。全球金融危机,实际上给中国的创新型经济体提供了展示其恢复速度的舞台。

例如,金融危机过后,江苏省(中国最大的制造业省份之一)的很多工厂的销售依旧困难。然而,在紧邻它们的苏州工业园(一个容纳了上百家高科技和创新企业的园区)里,高新企业却很快从金融危机中恢复,并且获得了生产总值21%的同比增长。

本土创新

中国政府于近期颁布了新的政府采购及知识产权政策,要求购买的产品中必须有“本土创新”比例,这些规定无疑会帮助中国本土公司获得更多的政府订单。因此,“本土创新”政策将会为中国本土公司创造一个更良好的投资气候。

平等的税收环境

此前,在中国的跨国公司可以通过一系列税收优惠及减免税政策获得收益。从1980年起,相比中国本土公司25%的所得税率,跨国公司能享受15%或24%的低税率。但是,从2008年开始,中国颁布了新的公司所得税条例,规定了所有企业均按25%的统一税率缴纳所得税。

成熟、繁荣、成长的市场

上述政策调整实际上是市场成熟和繁荣的标志,因为中国现在已经不必通过颁布优惠政策来吸引外资。

综上所述,现有的政策为中国本土公司创造了更好的成长环境,同时也增强了投资者对这些公司收入增长的信心。



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